Correlation Between Chemours and Rent A

Can any of the company-specific risk be diversified away by investing in both Chemours and Rent A at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Chemours and Rent A into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chemours Co and Rent A Center, you can compare the effects of market volatilities on Chemours and Rent A and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Chemours with a short position of Rent A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemours and Rent A.

Diversification Opportunities for Chemours and Rent A

0.37

Correlation Coefficient

Chemours  Rent A

Weak diversification

The 3 months correlation between Chemours and Rent is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Chemours Co and Rent A Center in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rent A Center and Chemours is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Chemours Co are associated (or correlated) with Rent A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rent A Center has no effect on the direction of Chemours i.e., Chemours and Rent A go up and down completely randomly.

Pair Corralation between Chemours and Rent A

If you would invest  1,829  in Chemours Co on September 4, 2024 and sell it today you would earn a total of  334.00  from holding Chemours Co or generate 18.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

Chemours Co  vs.  Rent A Center

Chemours

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Chemours Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental indicators, Chemours exhibited solid returns over the last few months and may actually be approaching a breakup point.

Rent A Center

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rent A Center has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Rent A is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Chemours and Rent A

The main advantage of trading using opposite Chemours and Rent A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemours position performs unexpectedly, Rent A can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Rent A will offset losses from the drop in Rent A's long position.

The idea behind Chemours Co and Rent A Center pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.